New research confirms that hope alone will not boost the representation of women on boards. The recently released Women on Boards 2013 Boardroom Diversity Index clearly shows that having managed targets is the most effective way to improve gender balance. The index reports the number of women on the boards of 850 organisations across eight sectors and the only groups that made any progress in the gender composition of boards were the Government and ASX200 – the two groups with targets.
“We’ve done this exercise for the past 5 years and the sectors that have made an effort and put targets in place are doing much better than those that just have good intentions,” Women on Boards director Ruth Medd told Women’s Agenda. “It does now appear – quite clearly – that managed targets are probably the only thing that will make much difference.”
It seems there is a growing appreciation of this fact among women.
“On our WOB survey we ask the question ‘Do you support quotas?’,” Medd says.
“The number of people who answer yes has grown. Many women are reluctantly beginning to realise that without stringent activity not much will change. Actively managed targets with proper reporting requirements is a good way to go.”
The ASX200 group has boosted the number of women on its boards significantly because of the Corporate Governance Principles and Recommendations in 2010 but it is waning.
“Because of the governance requirements around diversity the ASX group has made progress but it’s slowing down considerably,” Medd explains. “24 women have been appointed in 2013 which is a slight improvement but it’s clearly they need a bit more impetus.”
Without continued focus on improving diversity and gender balance on their boards this progress is might stall. Medd is hopeful the review of the corporate governance guidelines that is currently underway may result in positive change.
The government sector was the standout performer in the BDI.
“Only in the Government sector do we see more than 30% women on boards and committees,” Medd says.
“The former Federal Government set mandatory targets of 40% women on its boards by 2015 and exceeded this overall with significant progress across many portfolios.”
It is particularly promising that the top 34 Federal government boards by remuneration have almost reached the 40% target. Medd credits Penny Wong for much of this success.
“When Penny Wong was the minister for finance she implemented some innovative programs to solve the problem of getting access to more capable women,” Medd says. “They have done really well because of the system for reporting and things like the Board Links website.”
By way of contrast the BDI highlights how other groups without clear plans for change have stagnated.
“The Superannuation Trustees sector has done appallingly and it’s not for lack of education or intention,” Medd says. “There has been a lot of conversation there but not much action.”
This is particularly worrying, Medd says, given the Australian tax payer funds this sector to the tune of billions via the tax concessions for contributions.
“There is an urgent need for reform in this sector and the regulator – APRA – should consider making diversity a requirement of fit and proper policies for superannuation trustees. This would bring the sector into line with the ASX,” Medd says.
What is your view around targets or quotas?